Why Republicans Have No Ideas About Mass Unemployment

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Last Saturday, the extension of unemployment benefits originally passed at the outset of the economic crisis expired. The position of Democrats in Washington, backed by a growing mountain of economic research, is that macroeconomic and humanitarian considerations alike both argue for an extension of unemploymentbenefits.

The position of Republicans in Washington is rather strange — less a moral or economic argument than an expression of indifference. “These have been extraordinary extensions, and the Republican position all along has been ‘we need to go back to normal here at some point,’” argues Representative Tom Cole. “[W]hat we did was never intended to be permanent. It was intended to be a very temporary solution to a very temporary crisis,” echoes Representative Rob Woodall. Of course nobody intended for the crisis of mass unemployment to last five years. Nobody intended for the crisis to happen at all. It is simply weird to argue that, since the problem has gone on longer than intended, the response to the problem must end as well. The fire trucks don’t shut off the hoses simply because the fire should have been put out bynow.

Yet the weirdness, far from being random, reveals something deeper at work. The most obvious thing, of course, is a general lack of concern for the fate of the unemployed — or, at least, a casual assumption that the unemployed themselves must be to blame for their plight. But even a more generous reading of the Republican position, taking its most serious defenses at face value, reveals an intellectual hollowness. Half a decade into the economic crisis, the Republican Party has no serious ideas about the GreatRecession.

One of the few Republicans to directly defend his party’s refusal to extend unemployment benefits is Rand Paul. Unfortunately, as is so often the case, Paul’s ideas about unemployment insurance are cracked. Paul has repeatedlycited studies that show that employers discriminate against job candidates who have been out of work a long time. Paul simply assumes that people are staying unemployed so they can continue collecting unemployment benefits. But the economics paper Paul cites, according to the economist who wrote it, suggests the opposite of hisconclusion.

The Administration claims that every $1 of jobless benefits creates $1.80 in economic growth, based on the notorious “multiplier” in Keynesian economic models. This is the theory that you can increase employment by paying more people not to work, and that you can take money out of the private economy by taxes or borrowing withoutcost.

The argument here is that there’s a “cost” to “taking money out of the economy” to pay for unemployment benefits. What is that cost? Well, in normal conditions, higher deficit spending will cause interest rates to rise. But these are not normal conditions. Interests rates are as low as they can be. The zero bound is the policy dilemma of the moment. The Journal editorial page has been warning for years that rising interest rates are on their way, or already occurring. The utter failure of these predictions has not even slightly dented its jauntyconfidence.

Moochers.Photo: FPG/Hulton Archive/Getty Images

It is true that some research has shown that cutting off unemployment benefits can force the unemployed to search more aggressively (or desperately) for work — say, an out-of-work machinist might take a job for lower wages at the 7-11. But those studies all take place in the context of a normal economic cycle, not the mass unemployment we see today. The conditions of mass unemployment from the Great Recession dictate that cutting off benefits from the unemployed simply immiserates them because there are nojobs.

Republicans in North Carolina proactively demonstrated their party’s stance by cutting off benefits to the unemployed before it was tried elsewhere in the nation. The result was dismal: The state’s labor force is shrinking. Rather than getting jobs, the unemployed have simply stopped looking for them, because they don’texist.

Sharp conservative ideas about the recession can be found on the margins of the political debate. (See, for instance, Michael Strain in the Weekly Standard.) It’s certainly possible to reconcile conservative doctrine about the size of government with specific plans to address mass unemployment. But Republicans in Congress have not bothered to adopt any of these alternative proposals. Nor have conservatives in general displayed much of an interest in the topic of unemployment benefits. There’s an asymmetry of partisan interest on the subject somewhat akin to Benghazi, which obsesses the right and bores the left. Republican thought on mass unemployment is a restaurant with tiny portions that tasteterrible.

This is not to say that the GOP lacks any ideas about economic policy. Both parties have fairly well-defined ideas about the general role of taxes, spending, and regulation. The difference is that the Democratic Party also has a policy agenda that is specifically related to the special conditions of high unemployment and low interest rates. The Republicans are still merely asserting that their normal agenda applies just as well now as ever. The unique, dire conditions of the Great Recession shouldn’t be expected to undo all the party’s program, or to alter its general long-term ideas. (Democrats have not, and should not, given up their preference for universal health insurance, reduced greenhouse gas emissions, and so on, nor should Republicans have to abandon their preference for the opposite.) What they lack is any legislative response to the economic crisis. They just want to get back to normal, and since normality has not arrived, they’d just as soon pretend ithas.